SCOTUS: file sharing services can be liable for music theft

[green lantern]

http://www.cnn.com/2005/LAW/06/27/scotus.file.sharing.ap/index.html


WASHINGTON (AP) -- Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally, the Supreme Court ruled Monday, rejecting warnings that the lawsuits will stunt growth of cool tech gadgets such as the next iPod

[Churlant]

Growth shall not be stunted. File-sharing won't end either :p Of course, it's hard to find a copy of Kazaa Lite++ like some of us have... :D :angel:

-JC

[RageKage]

This is a very stupid decision. It will do nothing to stop file sharing, but it puts a huge amount of uncertaintly over technology companies.

The law in the area used to be based on the 1984? case against Sony and its betamax. The movie compainies tried to sue Sony for developing a technology that would be used to infringe copyright. The Court held that as long as there was a substantial non-infringing, and legitimate use for the technology, it would not be considered an illegal technology, and they could not be sued.

(this was a lucky loss for the movie industry, since rented VCR tapes ended up making it lots of money)

That ruling allowed for the development of a lot of technology that would likely not have otherwise developed, for fear of being sued.

This decision adds a whole bunch of uncertainty to the law. Now instead of a technology being illegal only if there is no legitimate, non-infringing use for it, a technology is illegal if itsw creators "intended" that it would be used to infringe copyright.

It replaced a clear line in the law with a very very murky one. I just don't get it.

[Ed Sane]

This is only going to encourage the developers to make p2p more secure, so its less likely to track what users or doing or what files they snag...Its not going to go away...

[Jarlaxle]

Or. the hosting sites will simply move offshore. Cayman Islands, China, South America, etc.

[RageKage]

Or. the hosting sites will simply move offshore. Cayman Islands, China, South America, etc.


This ruling has nothing to do with hosting sites. There are no hosting sites for these networks, except for the computers of individual users. What this decision says is that the software itself may be illegal, and its developers liable for the very act of inventing it.

It is a very dangerous decision for the technology that drives the Internet.

[JoeR]

I forget who compiled the data, but they aren't really losing very much money anyways. Most people who download the stuff wouldn't even have bought it otherwise.

It's hard to argue with the actual decision though. Having a P2P business model pretty much does require copywright infringement. I wouldn't use a P2P service with adds though anyways (I'm assuming thats how they'd be making the money)

Churlant, skip Kazaa and go for Shareaza.

[jamesrage]

Growth shall not be stunted. File-sharing won't end either Of course, it's hard to find a copy of Kazaa Lite++ like some of us have.

Limewire is better than Kazza.

I find the music industry is whining over something that some one with a radio and cassette tape recorder is already doing.

[JoeR]

Limewire is better than Kazza.

I find the music industry is whining over something that some one with a radio and cassette tape recorder is already doing.

Well we were bound to agree on something :lol:

[Duo_Maxwell]

Welcome to the age of the darknet (http://msl1.mit.edu/ESD10/docs/darknet5.pdf)

[Ed Sane]

I dont even bother with p2p programs, I just go to LAN parties all the content I can ever need with everyone sharing their files but without the risk...I think this falls under free-riding...

[Strel]

Much like the eminent domain case, this is not really anything all that new. Vicarious liability for copyright violations has been around for a few years now, and no one should be surprised by this decision. Frankly I can't believe people fight these things when the law is so clearly against them. They would better spend their time promoting legislative action or lobbying the recording industry directly. Here me now and believe me later: the Napsters of the world will never, ever win a lawsuit on this subject. A few years ago I bet my Cyberlaw students that I would send them $20 if any file-sharing organization won a case like this. So far I haven't written a single check.

The long and short of it is that it is stealing. In the eyes of the law it is the same thing as rolling a copy machine into a bookstore, photocopying a book, and rolling it out again without paying for it. You can like it or not but if you download this stuff you expose yourself to criminal and civil liability. True, the vast majority of people are not worth the trouble to go after, which is why the law allows copyright holders to sue or prosecute those with deeper pockets that facilitate the practice. Otherwise, they have NO other effective way to protect their investment. Producing music costs money - and you can say that the recording industry is greedy (and I would agree) but that doesn't change the fact that they have property rights to this material.

There is a reason up2date doesn't allow the posting of third-party material in its entirety - because it won't be the poster that they will come after, it will be him AND his ISP as well.

ITunes is only $0.99 per song, it's perfectly legal...and quality is guaranteed. I'm not promoting them specifically - there are other services as well. I gave up on free downloads when I found out what the potential criminal penalties were, and after downloading the Nth song that some fool had mislabeled as being something else by someone else.

Why do people think it is different just because it is on the Internet?

[Platypus]

Much like the eminent domain case, this is not really anything all that new. Vicarious liability for copyright violations has been around for a few years now, and no one should be surprised by this decision.
Actually there is something new in this decision. Since Betamax the standard of contributory infringement for technology developers has been whether the technology is "capable of substantial non-infringing use" (the exact words cited in the decision). The decision basically redefines capability to mean primary (or sole) intent; if there is evidence that there was also intent to profit from infringing use, according to Souter et al, that is sufficient to find for the plaintiff even if the capability for other use exists. Their argument against the defendants consists mainly of three parts (starting on page 21):

Each company showed itself to be aiming to satisfy a known source of demand for copyright infringement.
Neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity.
The commercial sense of their enterprise turns on high-volume use, which the record shows is infringing.

Here's the key: none of this addresses capability, which was previously the standard. The technology in question could have been (and was) entirely capable of substantial non-infringing use, yet these three statements could still have been true and led to a finding of liability.

Is the decision correct? I haven't actually made up my mind about that. I've always been bothered by the "but we could use it for something else" kind of argument, with its implied wink to co-conspirators. However, whether it's correct or not, it is a change in direction compared to previous decisions.

[Democritus]

I dont even bother with p2p programs, I just go to LAN parties all the content I can ever need with everyone sharing their files but without the risk...I think this falls under free-riding...

College campuses often have similar things going for them. Private hubs that are only accessable from computers in the residential areas of the school network. Any closed system is nearly perfectly secure.

[JoeR]

iTunes allows you to stream music from other people's computers. What there is now is a program called MyTunes that sort of piggybacks iTunes, and instead of streaming, it actually downloads. You just need people with good music tastes in your dorms ^_^

[poly_nightmare]

Limewire is better than Kazza.

I find the music industry is whining over something that some one with a radio and cassette tape recorder is already doing.

I use Limewire too. I don't use it often though. I tend to only download anime. I don't use it because it slows down my computer a lot at times.

[Strel]

Actually there is something new in this decision. Since Betamax the standard of contributory infringement for technology developers has been whether the technology is "capable of substantial non-infringing use" (the exact words cited in the decision). The decision basically redefines capability to mean primary (or sole) intent; if there is evidence that there was also intent to profit from infringing use, according to Souter et al, that is sufficient to find for the plaintiff even if the capability for other use exists. Their argument against the defendants consists mainly of three parts (starting on page 21):

Each company showed itself to be aiming to satisfy a known source of demand for copyright infringement.
Neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity.
The commercial sense of their enterprise turns on high-volume use, which the record shows is infringing.

Here's the key: none of this addresses capability, which was previously the standard. The technology in question could have been (and was) entirely capable of substantial non-infringing use, yet these three statements could still have been true and led to a finding of liability.

Is the decision correct? I haven't actually made up my mind about that. I've always been bothered by the "but we could use it for something else" kind of argument, with its implied wink to co-conspirators. However, whether it's correct or not, it is a change in direction compared to previous decisions.

There is contributory infringement and then there is vicarious liability for copyright infringement. Like everything else in the law, it is complicated and greatly depends on the facts of each individual case. An example of contributory infringement is a company being held liable for an employee using their system to distribute copyrighted material (we fired a guy here for downloading a bootleg of Band of Brothers last year). But entities can also be held vicariously liable by just receiving some benefit of someone else's copyright violation too. The "capability" part becomes irrelevant when the entity is benefitting in some way from the violation. Depending on the circumstances, they may not even have to KNOW it is going on, though that would affect the kind of damages they could suffer. We have the Church of Scientology to thank for that standard.:rolleyes: They successfully went after the violator (direct), the BBS operator (contributory) AND the ISP (vicarious). Kind of scary when you think about it. Up2date has my sympathy and I hope he sleeps well at night. :eek:

Is the decision correct in all respects? I don't know for sure - but the changes it makes are not radically different from what was already in the case law and the DMCA. In that sense, right or wrong, I would probably characterize it as a "synthesis" rather than a change in the law.

[Platypus]

There is contributory infringement and then there is vicarious liability for copyright infringement.
Indeed, but vicarious liability was on uncertain legal ground before this (hence the acceptance of Grokster as a test case). What this decision does is incorporate it into a new definition of contributory infringement, which is a significant change. I know a lot of P2P developers and intellectual-property activists, and they know their world just changed.

[Strel]

Indeed, but vicarious liability was on uncertain legal ground before this (hence the acceptance of Grokster as a test case). What this decision does is incorporate it into a new definition of contributory infringement, which is a significant change. I know a lot of P2P developers and intellectual-property activists, and they know their world just changed.


I don't know about uncertain...but I would agree that it wasn't as well settled as other aspects of it. The Digital Millenium Copyright Act was supposed to clarify that but like everything else, there are wrinkles and loopholes and cases of first of first impression. That's why intellectual property lawyers get paid so well, the lucky bastards. :(

As for the "world changing", I think that's an overreaction - not in the sense that the case doesn't do what you say it does (and I think it does), but in the sense that they should have seen this coming and should not be surprised by it. I believe it was inevitable.

[jamesrage]

Well we were bound to agree on something

It cracks me up that the music industry is up in arms.If you look at any p2p network and type in music group,the songs that have the most users are the same damn songs that you can practically hear 24/7 on radio,surely the morons who request the same songs over and over again know what the hell the tape recorder button on a stereo is.
Which is why I stopped listening to music radio and switched to listening to talk radio.

[RageKage]

I don't know about uncertain...but I would agree that it wasn't as well settled as other aspects of it. The Digital Millenium Copyright Act was supposed to clarify that but like everything else, there are wrinkles and loopholes and cases of first of first impression. That's why intellectual property lawyers get paid so well, the lucky bastards. :(

As for the "world changing", I think that's an overreaction - not in the sense that the case doesn't do what you say it does (and I think it does), but in the sense that they should have seen this coming and should not be surprised by it. I believe it was inevitable.


Do you think the VCR would have been developed under the standard set out in the Grockster case? Sony was shielded from liability with the betamax because there was a "substantial, non-infringing use" that the machine could be used for: time-shifting TV programs (taping programs to watch, once, at a different time). But obviously there are many more uses that people make of VCRs that are infringing. So couldn't the movie industry have argued that since the bulk of the betamax's possible uses would constitute infringment, the intent of the developers must have been (at least on a balance of probabilities) to develop an infringing technology?

[Strel]

Do you think the VCR would have been developed under the standard set out in the Grockster case? Sony was shielded from liability with the betamax because there was a "substantial, non-infringing use" that the machine could be used for: time-shifting TV programs (taping programs to watch, once, at a different time). But obviously there are many more uses that people make of VCRs that are infringing. So couldn't the movie industry have argued that since the bulk of the betamax's possible uses would constitute infringment, the intent of the developers must have been (at least on a balance of probabilities) to develop an infringing technology?


Yes, I think it would be developed anyway. P2P is a different situation. And the movie industry DID argue that, but lost.

There is reliable data that the vast majority of P2P traffic is copyrighted material. I'm not trying to be an apologist for greedy media companies, but the law and the facts are very much on their side. :sorry:

[RageKage]

Yes, I think it would be developed anyway. P2P is a different situation. And the movie industry DID argue that, but lost.

There is reliable data that the vast majority of P2P traffic is copyrighted material. I'm not trying to be an apologist for greedy media companies, but the law and the facts are very much on their side. :sorry:

But there is also a substantial part of that traffic which is not copyrighted material.

What if there were data saying that the vast majority of stuff copied on photocopiers were copyrighted, or the vast majority of the stuff taped on a VCR constituted infringment, - should the producers of those technologies be liable for that infringement?

Remember, this is very very different from when the Record Companies sued Napster. Napster operated a network. Grockster was just a piece of software. Yes it is a piece of software that is used by people (partly/mostly) to infringe US copyright law. But a modem is also a peice of technology that is used (partly/mostly) to infringe US copyright law. Why are its developers, and producers not possibly liable in the same way Grockster's are?

What this decision does is replace a clear line in the law, with something that must be looked upon on a case by case basis. I can see how, as a lawyer, you may not see this as a problem since it will mean more work for lawyers, but certainly you can see how it is a problem for all US technology developers.

[Platypus]

But there is also a substantial part of that traffic which is not copyrighted material.
The problem with the Grokster decision is that "substantial non-infringing use" is no longer relevant. According to the framework the court has laid out, it's only the infringing use that counts. If there was a known demand for infringement, no effort was made to stop it, and profit was derived from it, the court has said that's sufficient. Neither potential nor actual legitimate use enters into it.

I'm not saying I agree with it, but that's how the court decided. As Strel says, the law is now very much on the copyright holder's side.

[Strel]

But there is also a substantial part of that traffic which is not copyrighted material.

A valid argument - too bad the court didn't buy it.

What if there were data saying that the vast majority of stuff copied on photocopiers were copyrighted, or the vast majority of the stuff taped on a VCR constituted infringment, - should the producers of those technologies be liable for that infringement?

Not the producers, no. But again, P2P is a different animal. It's not like a photocopier enables OTHERS to violate a copyright - just the person standing in front of the machine. It is not just a matter of it being a different legal situation but also one of scale.

Remember, this is very very different from when the Record Companies sued Napster. Napster operated a network. Grockster was just a piece of software. Yes it is a piece of software that is used by people (partly/mostly) to infringe US copyright law. But a modem is also a peice of technology that is used (partly/mostly) to infringe US copyright law. Why are its developers, and producers not possibly liable in the same way Grockster's are?

Absolutely - but the difference is that a modem manufacturer is not in as much of a position to profit from copyright infringement. They have to draw the line somewhere and they have apparently decided to use the fact that "most" of the P2P stuff is copyrighted to carve out an exception to the Sony case. You are, though, making exactly the argument their attorneys should have made and I will have to take a closer look at the decision to figure out how the court addressed this, if they did. Personally I think you have a good point there and if the court didn't address it they were remiss...

What this decision does is replace a clear line in the law, with something that must be looked upon on a case by case basis. I can see how, as a lawyer, you may not see this as a problem since it will mean more work for lawyers, but certainly you can see how it is a problem for all US technology developers.

Oh hell yes we love this sort of thing. More chaos = more money for us! Unfortunately it's not in my area of practice. :(

[Platypus]

You are, though, making exactly the argument their attorneys should have made and I will have to take a closer look at the decision to figure out how the court addressed this, if they did. Personally I think you have a good point there and if the court didn't address it they were remiss...
I'll save you some time, Strel; they did. They begin their address of it on page 16, but this is from page 17:
Sony's rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence...
They then go on to show that the defendants had "active intent" to induce infringement, eventually leading to the three-part standard I mentioned above. A substantial (heh) part of the ruling is devoted to addressing the precise point that RK has raised.

[Strel]

I'll save you some time, Strel; they did. They begin their address of it on page 16, but this is from page 17:

They then go on to show that the defendants had "active intent" to induce infringement, eventually leading to the three-part standard I mentioned above. A substantial (heh) part of the ruling is devoted to addressing the precise point that RK has raised.


Yeah...if they found such intent at the trial level (and I have to wonder what kind of evidence they used), then Grokster was pretty much screwed from the start.

Thanks though - I only read the synopsis I got on a listserv.

[RageKage]

Yeah...if they found such intent at the trial level (and I have to wonder what kind of evidence they used), then Grokster was pretty much screwed from the start.

Thanks though - I only read the synopsis I got on a listserv.


This never had a trial. The original suit against Grockster and Morpheus was dismissed by both the federal court and the federal court of appeals in a motion for summary judgement (based, clearly on the 1984 Sony case).

Now the Supreme Court has overturned those decisions and sent it back for trial. So the only side offering evidence of "intent" in the Supreme Court hearing were the plaintiffs (record companies) who had to show they could make a prima facie case.

I suspect there is still a good chance that this could go right back up to the Supreme Court on the question of what exactly constitutes intent and how much evidence is needed to prove it, regardless of who wins the trial.

[Strel]

This never had a trial. The original suit against Grockster and Morpheus was dismissed by both the federal court and the federal court of appeals in a motion for summary judgement (based, clearly on the 1984 Sony case).

Now the Supreme Court has overturned those decisions and sent it back for trial. So the only side offering evidence of "intent" in the Supreme Court hearing were the plaintiffs (record companies) who had to show they could make a prima facie case.

I suspect there is still a good chance that this could go right back up to the Supreme Court on the question of what exactly constitutes intent and how much evidence is needed to prove it, regardless of who wins the trial.

Intent is not such an easy thing to prove without damning admissions from the accused.


Hopefully Grokster's advertising materials don't contain any, or they are well and truly...well you know.

[JoeR]

What if someone just makes the software but doesn't profit from it?

[Platypus]

What if someone just makes the software but doesn't profit from it?
Good question. Profit, or the expectation of profit, seemed to be key to the court's reasoning about intent, but that doesn't necessarily make anything clearer. For example, Bram Cohen doesn't sell BitTorrent but he does solicit donations (http://www.bittorrent.com/donate.html) which are currently his main source of income. Does that count? He thinks he's a genius, so he can't claim not to know that BitTorrent often used to infringe copyright, and he has not taken any technological steps to prevent that. Whether or not he is guilty of contributory infringement under the standard set by Grokster therefore hinges on whether a plaintiff can prove intent. On the one hand it's not quite like he wrote a letter saying that he hoped to make a fortune from copyright infringement. On the other, is it really believable that he quit his job and had no other income while he worked on BitTorrent, but nonetheless had no intention to profit from the notoriety (based on popularity, based in part on infringement) that BT has brought him? The fact that he relies on it for his income today suggests that the answer might be no.

One of the worst things about this decision is that people like Bram don't know whether they would be able to fend off a lawsuit. What they do know is that there's likely to be one, from a well-funded organization like the RIAA or MPAA and in a court that seems increasingly hostile to this kind of technology. As Lawrence Lessig has warned (http://www.businessweek.com/technology/content/jun2005/tc20050629_2928_tc057.htm), that alone might chill innovation in this area for a decade.